Ithaca Energy Share Discussion Threads

[rivaldo] 23/6/2016 13:59

Cheers laserdisc. Some Finncap comment too:



Extract:

"Ithaca will use the pipeline to take production from Stella to the Norpipe system, which is linked with processing facilities on Teeside. This is a cheaper option than using tankers and involves less disruption. The pipeline is expected to cost Ithaca $20 million (£14m).

Dougie Youngson, oil and gas analyst at brokerage finnCap said: “This is very positive news as it further lowers the breakeven oil price for the project.” He noted Ithaca should be able to produce oil from Stella for $10 per barrel in terms of operating costs, making the field potentially the lowest cost producer in the North Sea. "

[georgie pie] 23/6/2016 11:30

great to see a quick reaction from finncap.....whos got a cystal ball to see where oil will be in oct???

[laserdisc] 23/6/2016 10:34

thanks rivaldo

[rivaldo] 23/6/2016 10:21

Finncap have reiterated their Buy and raised their price target to 96p from 54p today:



And on the pipeline deal...

http: //www.proactiveinvestors.co.uk/companies/news/127384/ithaca-energy-looks-forward-to-first-oil-from-stella-field-127384.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-353589-Campaign+-+22%2F06%2F2016

Extract:

"By pipelining crude the project’s long term value is significantly enhanced, Ithaca said. It noted that fixed operating costs would be reduced as a result, while both operational uptime and reserves recovery would also be improved.

Richard Savage, analyst at broker Mirabaud, highlighted that the expected cost of connecting the pipeline would be around US$20mln (net to Ithaca), and he says the company had previously anticipated it would cost more than three times as much.

He explained: “the coincidence of a third party disconnecting from the pipeline resulted in substantial cost savings.”

First production from the Stella field is anticipated in late September.

Ithaca shares gained 2p, just over 3%, changing hands at 67p each."

[steve73] 22/6/2016 14:17

It will increase recovery by reducing OPEX in late field life... Cessation of Production (or CoP) is when the OPEX exceeds the revenue. In late field life with low production volumes, anything to reduce OPEX can allow a significant life extension.. Cutting back on maintenance can also have a huge impact (although it can also bite you in the bum if you cut back too soon). Anything that delays CoP can have benefits especially in a short term low oil price environment by getting you into the next high price in the cycle. Also it delays the additional expense of decommissioning.

Reduction of downtime is less of an benefit IMO, but sure it removes the need for the FSO and subsequent weather problems..

[whiskeyinthejar] 22/6/2016 13:35

RNS mentions potential value of pipeline as production hub as you say.


But also, I'm not a petroleum engineeer, but I know operational down time can be damaging to a field.

Anyway, rns says it will:

"enhance operational uptime, resulting in improved reserves recovery and increasing the long term value of the GSA as a production hub."

So they are saying it will have value as a hub, but as pipeline will reduce downtime it will therefore increase recovery.

[jovi1] 22/6/2016 13:16

Steve you are right but I suspect that pipeline will not only help this development but there is potentials for the rest of iae license in the same area too (including potential asset acquisition). with this in my mind I suspect more development will happen as soon as stella start

[steve73] 22/6/2016 12:24

Based on First Energy's assessment of a $1.5//bbl saving of OPEX, with GSA thought to contain around 30MMbbl the pipeline could save upto $45M over its operating life (less any oil exported by tanker in the first year or so). The upfront cost of $20million does not sound like a particularly good deal (once you run the NPV calcs), although it will certainly help with later field life.

So this suggests to me that there could be some significant upside to the recoverable oil, or some additional near field potential.

[binarypilot] 22/6/2016 12:10

Some M&A starting now that brent spot has stablised higher.

Bankers Petroleum operating in Albania has been bought by the Chinese Geo-Jade for nearly 3 times the prevailing price over the months before it was announced.

[jovi1] 22/6/2016 11:14

the reason for the drop is that few have gone little ahead of expectations on the time frame of sail away. the news today are a lot better that share price suggest and I suspect few T10 and T20 have sold at this news and will re open in few weeks
in the main time we are saving from the 30 mill bonus and investing approx. similar amount inn the pipeline all sound good to me

[ngms27] 22/6/2016 10:38

I'd think there would be perhaps a 1 to 2 week halt in Production to switch over nothing much more.

[gersemi] 22/6/2016 10:36

It will be a seamless transition. IAE mgt are not muppets ffs.

[marvelman] 22/6/2016 10:19

They haven't changed their mind but have grabbed an opportunity that was not previously available. In the pre pipeline interim they will keep to plan A and use tankers.

[jonc] 22/6/2016 10:19

"allowing a switch from tanker loading during 2017."

It seems pretty clear to me that the pipeline does not involve a delay in production.

A delay to that extent would be material and would need to have been disclosed now.

[fsawatcher] 22/6/2016 10:08

pipeline prob good news long term but company not say nuffin about possible cost savings

they change mind on this development too many times

does this mean first oil now put back or delayed while pipeline completed

how long it take to finish pipeline

long term good news

short term bad news as too many unanswered questions

[georgie pie] 22/6/2016 08:25

agreed binarypilot this is a great development for the company going forward...much more cost effective than tanker transportation....id love a crystal ball to see where we are come nov/dec!

[sawadee3] 22/6/2016 08:24

Easiest money we have ever made, as predicted :-)

Plenty more to come :-)

Happy days chaps :-)

[binarypilot] 22/6/2016 08:13

Big volumes guys. A great sign.

The value of a pipeine instead of shipping on tankers cannot be underestimated.

All year round, weather independent delivery at low cost.
Very happy with this unexpected developemnt.

[jim digriz] 22/6/2016 07:46

The share price went down in two distinct movements. Firstly it was shorted due to perceived operational risk over FPF1. Secondly it went down, with other oil companies, due to the low oil price, irrespective of the fact it was already low. That is how it got so very low. I reckon it has reversed one of those movements and still has another to go. Not sure we'll get a rational valuation until the new production is in place and the FPF1 delays are history.

IMHO DYOR BYOB

Jim

[georgie pie] 22/6/2016 07:38

Looks very interesting now....and with oil rising again @ $50.97 and market expectations of $65 in Q3 when we start pumping this puts us in a great position. It gives me a lot of confidence that the board is still looking closely at costs and taking advantage of industry down turn to push for the best deals.....its makes IAE a very attractive target.